Correlation Between KuCoin Token and VeChain

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Can any of the company-specific risk be diversified away by investing in both KuCoin Token and VeChain at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KuCoin Token and VeChain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KuCoin Token and VeChain, you can compare the effects of market volatilities on KuCoin Token and VeChain and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KuCoin Token with a short position of VeChain. Check out your portfolio center. Please also check ongoing floating volatility patterns of KuCoin Token and VeChain.

Diversification Opportunities for KuCoin Token and VeChain

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between KuCoin and VeChain is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding KuCoin Token and VeChain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VeChain and KuCoin Token is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KuCoin Token are associated (or correlated) with VeChain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VeChain has no effect on the direction of KuCoin Token i.e., KuCoin Token and VeChain go up and down completely randomly.

Pair Corralation between KuCoin Token and VeChain

Assuming the 90 days trading horizon KuCoin Token is expected to generate 13.41 times more return on investment than VeChain. However, KuCoin Token is 13.41 times more volatile than VeChain. It trades about 0.06 of its potential returns per unit of risk. VeChain is currently generating about 0.01 per unit of risk. If you would invest  1,917  in KuCoin Token on December 30, 2023 and sell it today you would lose (710.00) from holding KuCoin Token or give up 37.04% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

KuCoin Token  vs.  VeChain

 Performance 
       Timeline  
KuCoin Token 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in KuCoin Token are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, KuCoin Token exhibited solid returns over the last few months and may actually be approaching a breakup point.
VeChain 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in VeChain are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, VeChain exhibited solid returns over the last few months and may actually be approaching a breakup point.

KuCoin Token and VeChain Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KuCoin Token and VeChain

The main advantage of trading using opposite KuCoin Token and VeChain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KuCoin Token position performs unexpectedly, VeChain can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in VeChain will offset losses from the drop in VeChain's long position.
The idea behind KuCoin Token and VeChain pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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